What to expect with the end of the consumer carbon tax in B.C.

Gas prices are likely to see a big drop next week, when the province officially repeals its consumer carbon tax, but that won’t be the only change.

The government had earlier promised to pause a scheduled increase on the tax with the news that the federal government was pressing pause on Ottawa’s price on carbon and lifting the requirement for provinces.

In an update Tuesday, the B.C. government says it’s “not only halting the scheduled tax increase” but tabling legislation to dismantle the province’s carbon tax altogether by April 1.

UBC Sauder School of Business professor Werner Antweiler says the drop could be as steep as 17 cents per litre overnight.

Fuel and natural gas sellers should “make every effort to ensure their customers are not charged the carbon tax on purchases” as of the first of next month, the province advised in a statement.

Antweiler doesn’t foresee many problems there.

“It’s a very competitive industry, so I do not expect significant delays in the implementation here when it actually is coming forward. So within a day or two, we should all see the significant drop in gasoline prices at the pumps,” he explained.

Antweiler says a gas station that doesn’t immediately update its pricing would likely lose business as drivers search for savings.

He says while daily commuters will see the change as a win, British Columbians will no longer be receiving their quarterly climate action tax credits as a result of the carbon tax being lifted.

Antweiler says the carbon tax also paid for cuts to income taxes for corporations and individuals, as well as PSB rebates.

“Now the big question is, there is a $1.5-billion gap up to that level that is left by the elimination of the carbon tax. How is this gap going to be closed? Is it just raising the deficit, or will the government need to find ways to correct this deficit and look at other mechanisms to close it?”

Earlier this month, Premier David Eby said the province will “continue to ensure that big industrial polluters pay their fair share” by regulating the price on carbon for big emitters.

On Tuesday, the statement said B.C. also offers industrial emitters “cost-effective ways to cut emissions.”

Antweiler says that change won’t happen overnight.

“There is no quick fix here to reach these large emitters that would actually change their output,” he explained.

“It will take time to see improvements here, and let alone if you actually have a lot of these new facilities that would all add more emissions. So in the end, it looks like in the short run, we’re going to be moving backward. We’re going to be looking at an increase in carbon dioxide emissions rather than a reduction in carbon dioxide emissions.”